CPPCC Calls for Improved Safeguards

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Last updated at: (Beijing Time) Thursday, July 10, 2003

CPPCC Calls for Improved Safeguards

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Members of China's top political advisory body Wednesday called for a stronger legal underpinning for China's private sector, which makes up more than 30 per cent of the country's gross domestic product.

Ren Wenyan, a member of the Standing Committee of the 10th National Committee of the Chinese People's Political Consultative Conference (CPPCC), said the legal system to protect private property remains very weak.

A report to the CPPCC from the All-China Federation of Industry and Commerce said the lack of effective legal protection is a major problem in protecting both private property and intellectual property rights.

Ren, who is also a member of the Shanghai Federation of Industry and Commerce, suggested the loosening of controls to help small and medium-sized enterprises and private firms get bank credit more easily.

She said there were over 235,000 private enterprises in Shanghai, each with an average registered investment of more than 1.5 million yuan (US$182,200).

The number of the private enterprises in the city grew at an annual rate of 30 per cent, said Ren.

This means that an average of 185 new private enterprises appear in the city every day.

"Currently, one-third of the employees in the city work for private enterprises," she said.

However, she stressed that difficulties in getting bank loans have hindered the development of private enterprises.

"Many of the private enterprises have entered into the new and high-tech field and obtaining loans has been a headache for them for a quite a long time," she said.

Echoing Ren's remarks, Liu Feng, a CPPCC member from East China's Zhejiang Province, which has the most developed private economy in China, said that only when the banking system is fully developed will China's private enterprises be able to acquire more loans.

Obtaining loans from State banks has been extremely difficult for the private sector, he said, adding that other sources of financing are also limited.

Among stock listing, for example, there were only 139 private companies listed on China's public-sector dominated stock markets by the end of 2002, accounting for 11.8 per cent of all listed companies.

In Zhejiang Province, private enterprises have increased to more than 200,000. Now the largest taxation and financial income in the province comes from private businesses.

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